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 Over the past decade, Singapore's economy has expanded by a 6.4
percent annual average. Tharman said that he would be happy if
Singapore grew 3 percent a year, as long as growth was driven mainly
by gains in productivity.
"Three percent growth is good growth," he said during an interview
on Thursday.
High past growth has brought rising numbers of foreigners to work in
wealthy Singapore, which in turn has spurred discontent among
citizens angered by the strains put on infrastructure and services.
Between 2000 and 2013, Singapore's population rose to 5.4 million
from 4 million, with foreigners accounting for the bulk of the 35
percent increase.
Unhappiness about inflows of foreigners helped an opposition party
gain ground in the 2011 general elections as the People's Action
Party, which has ruled Singapore since independence in 1965, won
only 60 percent of votes, its worst showing to date. The next
election must be held by January 2017.
Tharman, who is also a deputy prime minister, said the government
accepts a slower growth rate as the cost of ensuring the country
retains its national identity, combats over-crowding and keeps the
ratio of foreign to local workers at around one-third.
NOT LIKE DUBAI
"We are never going to be Dubai, we are a country with a social
ethos that we take very seriously," the 57-year-old finance minister
said.
The number of foreigners in Dubai is larger than that of locals, a
result of its aggressive economic growth strategy.
At the end of 2013, there were 1.32 million foreigners in Singapore
who held employment or work-passes, around 38 percent of the total
work-force.
In 2010, Singapore launched a 10-year plan to restructure its
economy, aiming to increase productivity and cap the ratio of
foreigners in the workforce at around one-third. The plan aimed to
raise the productivity rate by an average of 2 to 3 percent a year,
though it actually fell in 2012 and 2013.
In line with the plan, the government has imposed regulations to
curb hiring of overseas workers in some sectors.
Now many companies, particularly in the construction and hospitality
sectors, are clamoring for a let-up in the rules, saying they are
hurting their businesses.
Last week, Prime Minister Lee Hsien Loong said the government would
delay S$2 billion ($1.59 billion) of construction projects in order
to reduce demand for foreign labor. [ID:nL3N0OE2KM]
Tharman said no tweaks would be made to the rules to help companies
in the sectors that are struggling, as they had to adjust and find
more productive ways of working instead.
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"Giving them a little more slack can make some sense in the
short-term but it delays that long-term transition," he said.
"We know that this is a transition that can be done, it's not
inventing something that hasn't been done elsewhere."
SOME INDUSTRIES WILL EXIT
For some companies though, he said, the rules may ultimately mean
they have to leave Singapore as its economy becomes less competitive
for some industries.
"You can't move into higher value, high innovation activities
without freeing up labor and land from the old activities, but you
have to leave it to the market," Tharman said.
There are concerns that unhappiness about the number of foreigners
in Singapore is causing some citizens to become hostile towards
them.
Last month, organizers of a planned celebration on Singapore's main
shopping street of Philippine independence day canceled it after
online abuse directed at the Filipino community.
Tharman said he didn't believe xenophobia was a major problem among
Singaporeans or a threat to foreign investment.
Citizens "would be concerned for valid reasons if there is
overcrowding in the buses or in their housing estates" he said. "But
I don't think they are motivated in an unhealthy way."
In 2013, Singapore's economy expanded 3.9 percent. The government
forecasts growth of 2-4 percent this year. Curbs on hiring foreign
workers and steady economic growth mean the labor market is
particularly tight, with unemployment hovering around 2 percent.
($1 = 1.2569 Singapore dollars)
(Reporting by Rachel Armstrong and Paul Ingrassia; Editing by
Richard Borsuk)
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